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Telecommunication Operators in Africa: The Case for Multinational African Operators

26 May, 2013

ICT Africa
May 26, 2013

Many Africans are vehemently opposed to monopolism in telecommunications because of their experiences with government controlled and inefficient PTTs of the past. The change in the regulatory environment that brought in competitive mobile operators in Africa has completely shifted the paradigm and triggered the ICT revolution in Africa. That said there is a case for strong multinational operators with operations in multiple African countries.

In a recent article on connecting African countries , we discussed how all African backbone networks should be interconnected into one seamless African backbone network. There are more than fourty operators throughout Africa and it could be quite a mammoth task to negotiate interconnection agreements between all of them in order to achieve one network.

When larger operators or infrastructure companies operate in multiple countries, the task of linking Africa becomes less daunting. We gave an example of Liquid telecommunication that has a fibre network that covers a number of African countries – South Africa, Zimbabwe, Zambia, DRC, Kenya and Uganda. If there were a few additional operators with footprints in the other countries, it becomes much easier to get all the countries interconnected.

Mobile operators such as MTN and Airtel Africa have significant footprints in Africa. Airtel has coverage in 14 countries while MTN’s footprint covers 13 countries. Combined with Liquid Telecom’s coverage of about 6 countries, the three companies account for coverage of at least 25 sub-Saharan African countries – considering that they overlap in some countries.

If these three giants could connect their networks together, we can easily have 25 countries on one seamless network in Africa. If the recent acquisitions of Warid in Uganda by Airtel Africa and Kenya Data Networks by Liquid Telecommunications are anything to go by, it is likely that these large companies will expand into other African countries and make it easier for more countries to be interconnected with one another.

The presence of large African operators with large geographical footprints, such as MTN and Airtel (and others like Tigo and Vodacom) has decreased roaming rates to levels similar to domestic tariffs in the countries they operate in. For example the Airtel “One Network” offers customers roaming rates in 14 countries across Africa that are equal to local rates. In addition to the establishment of local exchange points and other advantages of a seamless African network we discussed earlier, the interconnection of all African networks will significantly reduce calling rates from one African country to another.

While monopoly has its disadvantages, the existence of large multinational operators in Africa can accelerate the interconnection of the continent and help African countries communicate with each other more cost effectively.